NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Ruud de Mooij

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

Working Papers

March 2012'Fiscal Devaluation' and Fiscal Consolidation: The VAT in Troubled Times
with Michael Keen: w17913
This paper focuses on two core tax design issues that arise in addressing current fiscal challenges It first explores the idea, prominent in troubled Eurozone countries, of a ‘fiscal devaluation:’ shifting from social contributions to the VAT as a way to mimic a nominal devaluation. Empirical evidence is presented which suggests that in Eurozone countries this may indeed improve the trade balance quite sizably in the short-run, though, as theory predicts, the effects eventually disappear. The paper then assesses the wider scope for VAT reform in meeting fiscal consolidation needs, developing and beginning to apply a methodology for finding additional VAT revenue in ways less distortionary and fairer than further raising the standard rate.

Published: "Fiscal Devaluation" and Fiscal Consolidation: The VAT in Troubled Times, Ruud de Mooij, Michael Keen. in Fiscal Policy after the Financial Crisis, Alesina and Giavazzi. 2013

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us